Beyond Fundamentals: On the Road Across Emerging Markets

How traveling the globe to meet companies & customers can help uncover sources of competitive advantage

Video Transcript

Why We Travel

At Polen Capital, we see ourselves as long-term business owners, not just owners of pieces of paper that trade on stock exchanges. We believe it’s crucial to travel and see our companies on the ground – to meet their management, customers, and employees and to understand the unique environment in which they operate. Coming out of the pandemic, we’ve been able to get back on the road again. In recent months, we’ve traveled to countries across four continents.

What We Observe

A highlight of our recent trip to Vietnam was our meeting with Mobile World. It is the country’s leading mobile retailer and has recently expanded into the supermarket business. To understand Mobile World’s right to win in this space, we met with its CEO and visited its largest competitor. We conducted multiple store visits across Mobile World’s supermarket chain and went to the wet markets, which remain the dominant form of grocery retailing in Vietnam and, thus, the key competitive threat the company will need to overcome to make its supermarket business successful. We came away from the trip with confidence in Mobile World’s potential to lead the development of formalized grocery shopping in Vietnam.

Our visit to WEG Industries was another positive experience of our recent travels. WEG is located around 500 km south of São Paolo in a city called Jaraguá do Sul. It’s home to WEG’s original factory and today is one of the world’s largest motor plants. The company employs around 10% of the city’s population. Often, multiple generations of a family work there. Our on-the-ground meeting and site visit helped deepen our understanding of why scale and culture are such long-term competitive advantages for this business.

It has been fantastic to be able to travel again, practicing the nuts and bolts of investing in emerging markets. It has been comforting to see that the day-to-day activity in emerging markets is as dynamic and vibrant as it’s ever been.

As we look forward, we remain incredibly excited about some of the long-term investment opportunities available in emerging markets today.

—Damian Bird, CFA
Head of Team, Emerging Markets Growth

Important Disclosures
This information is provided for illustrative purposes only. Opinions and views expressed constitute the judgment of Polen Capital as of January 2023 and may involve a number of assumptions and estimates which are not guaranteed, and are subject to change without notice or update. Although the information and any opinions or views given have been obtained from or based on sources believed to be reliable, no warranty or representation is made as to their correctness, completeness, or accuracy. Opinions, estimates, forecasts, and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice, including any forward-looking estimates or statements which are based on certain expectations and assumptions. The views and strategies described may not be suitable for all clients. This document does not identify all the risks (direct or indirect) or other considerations which might be material to you when entering any financial transaction.

The information provided should not be construed as a recommendation to purchase or sell any particular security. There is no assurance that any securities discussed herein will be in the composite at the time you view these materials or that any securities sold have not been repurchased. The securities discussed do not necessarily represent the composite’s entire portfolio. Actual holdings will vary depending on the size of the account, cash flows, restrictions, and any trade orders in progress on the date as of when holdings are shown. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable or that any investment recommendations we make in the future will equal the investment performance of the securities discussed herein. For a complete list of Polen’s past specific recommendations holdings and current holdings as of the current quarter end, please contact [email protected].

Past performance does not guarantee future results and profitable results cannot be guaranteed.